The recent and well-publicised recalls of ‘Emma Wiggle’-themed toys, the Fisher-Price® Dots & Spots Puppy Cradle 'n Swing models and 6,000 RAM trucks are timely reminders that businesses need to ensure they are aware of their obligations under the Australian Consumer Law (ACL). Earlier this year, we published ‘Product Recalls – A Practical How-To Guide’, our comprehensive guide to conducting voluntary and mandatory product recalls. As the year draws to an end, we offer our top tips for conducting a voluntary product recall.

1. Have a product recall plan – and use it

Given the urgency of the actions required when a recall situation occurs, suppliers need to develop and maintain an effective and up-to-date product recall plan. Doing so will ensure compliance with notification laws, minimise potential liability from the supply of unsafe goods and ensure a high return rate of impacted products.

The product recall plan should:

• contain a comprehensive list of all retailers or supply chain customers;
• set out the roles and responsibilities of each key employee (including the appointment of a recall coordinator);
• address the supplier’s communications strategy to all relevant stakeholders;
• contain a step-by-step procedure for the notification of all relevant parts of the supply chain and the removal of goods from sale (and broader supply chain).

In addition, maintaining meticulous records of supply arrangements and product tracking data, including batch numbers and serial numbers will ensure that, if a recall arises, you’ll have all the information you need at your fingertips.

2. Don’t delay

Initially, once you become aware of a potential safety issue, it’s of critical importance for you to immediately gather information about the nature of the product and its hazards. You should identify the:

• affected products, including the product’s name, model, serial number and similar identifying information;
• defect, danger or hazard and the cause of the issue;
• potential harm to consumers and how that harm may occur;
• risk of the harm that consumers may suffer when using the relevant product, including the severity of the harm, the defect rate, the intended user of the product and other users of the product.

If you have completed your risk assessment and determined that a product needs to be recalled, you should immediately stop the supply of the product to the market (at both a wholesale

3. Be cognisant of your reporting obligations

Once you have decided to voluntarily recall a product, you must notify the Australian Competition and Consumer Commission (ACCC) within two days of taking a “recall action”, which includes the following types of actions:

• any public announcement that the product is being removed from sale;
• any request to customers or suppliers to return a product for a refund, replacement or modification;
• any request to consumers to destroy a product;
• a supplier supplying new product parts or issuing software upgrades to fix safety risks.

Suppliers who fail to notify the ACCC within two days of taking a recall action (as described above) will be exposed to the risk of committing a criminal offence or being subject to a civil pecuniary penalty up to a maximum of $16,650.

In addition, if a product has (or may have) caused a death, serious injury or illness (whether or not the product has been or is being recalled), a supplier is required to report this to the Commonwealth Minister responsible for consumer affairs (Minister) within two days of becoming aware of the incident. The report is submitted to the ACCC, who accepts this report on behalf of the Minister. If a supplier does not report a death, serious injury or illness within the two-day timeframe, they may have to pay a penalty of up to $16,650.

4. Communication and clarity are key

Be clear, complete and timely with all stakeholders and quickly determine who will lead the recall. Often, there will be more than one entity that falls into the definition of ‘supplier’. The ACCC expects recalls to be led by the supplier who is primarily responsible for addressing the risk, defect or hazard. A supplier higher up in the supply chain may be able to deliver a more streamlined and consistent recall strategy across the supply chain, including retailers.

5. Prepare and/or implement a PR strategy

The strategy, which should be set out in your product recall plan, should include:

• alerting customers about the product recall and the safety risk posed by the unsafe or dangerous product (including the different methods of communication to be used, such as in-store, social media, advertising, posters and, where contact details are available, emails and text messages);
• notifying retailers, franchisees, distributors and other parts of the supply chain; and
• setting up an easily accessible complaint process and a dispute resolution process for affected consumers to contact.

6. Ensure you comply with your consumer guarantee obligations

Your remedies should be consistent with the consumer guarantee provisions in the ACL. This extends to covering reasonable costs that consumers incur when returning a product. Consumer guarantees cannot be taken away by anything a business says or does. This can include a business putting a specific time limit on when a consumer can seek a remedy. Offering a remedy under a recall does not remove the consumer’s rights to an alternative remedy under the consumer guarantees in the Australian Consumer Law.

7. Keep the ACCC up to date during the recall

Submit progress reports to the ACCC throughout the course of the recall. There is no timeline for how long a recall should be conducted. However, the ACCC will notify a supplier when progress reports are no longer required.

8. Keep meticulous records of all steps taken during the recall

This will make it easier for the ACCC to conclude the recall. As the recall progresses, suppliers should:

• have a process for regularly reviewing the progress of the recall;
• continually assess the risk of the unsafe or dangerous product (and whether the risk assessment needs to be updated at any time);
• track products suppliers have provided a remedy for and how many affected products have been returned;
• track how many consumers have been reached and whether appropriate responses have been received;
• review the communication strategy regularly to ensure that it remains effective;
• adjust the recall communication plan based on the progress of the recall; and
• ensure that you are providing ongoing updated communications to consumers.